The new Disaster Tax Relief and Airport and Airway Extension Act of 2017 provides additional relief and flexibility for retirement plan participants impacted by recent hurricanes, including relaxed rules for plan distributions, withdrawals and loans.
At the 36th Annual ISCEBS Symposium, Todd Solomon presented best practices for plan fiduciaries to avoid 401(k) plan and 403(b) plan class action lawsuits. Todd discussed fiduciary responsibilities under ERISA as well as potential consequences of breaching fiduciary responsibilities. He highlighted notable cases brought against plan fiduciaries, including those that allege excess plan fees. Todd discussed the need for rigorous monitoring and documentation of the review process.
Tax-exempt employers face a matrix of tax and disclosure issues in designing an appropriate supplement retirement program. This resource intends to examine the income tax, payroll tax and Form 990 reporting aspects of the major plans currently available to tax-exempt employers, and review those major plans from the reference point of several major design considerations.
With only two months left in the year, it’s time to make sure your-end tickler list is complete! Join us for a roundtable discussion with McDermott partners Judith Wethall, Finn Pressly, Andrew Liazos, Diane Morgenthaler and Jeff Holdvogt which will cover the employee benefit issues you’ll need to cross off your list before Year’s Eve.
Date
Friday, November 3, 2017
Time
10:00 – 10:45 am PDT
11:00 – 11:45 am MDT
12:00 – 12:45 pm CDT
1:00 – 1:45 pm EDT
Mark your calendars for the first Friday of the Month! McDermott’s Employee Benefits Group will be delivering timely topics in our “Fridays With Benefits” monthly webinar series.
The IRS recently issued new mortality tables for 2018, which will likely increase pension funding liabilities for many plan sponsors. Plan sponsors should consider options to delay the use of the new mortality tables for funding purposes, while large plan sponsors should consider the option to utilize plan-specific mortality tables instead.
The Internal Revenue Service (IRS) recently announced the cost-of-living adjustments to the applicable dollar limits for various employer-sponsored retirement and welfare plans for 2018. Although some of the dollar limits currently in effect for 2017 will remain the same, the majority of the limits will experience minor increases for 2018.
On October 12, 2017, McDermott Will & Emery filed a lawsuit on behalf of The ERISA Industry Committee (ERIC) challenging new reporting requirements under Oregon law as applicable to retirement plans subject to ERISA. Below is a press release from ERIC and Q&As regarding this litigation.
OregonSaves is the state of Oregon’s state-run retirement program that automatically enrolls employees of employers into individual retirement arrangements (IRAs). Unless an employee opts out of OregonSaves, a portion of each paycheck is added to an IRA account in the employee’s name. Oregon is the first state to establish an auto-enrollment IRA program.
An employer that offers a qualified plan is not required to participate in OregonSaves, but only if it has a valid and current certificate of exemption. Obtaining this exemption depends upon reporting to the state of Oregon regarding an employer’s qualified plan. For employers with 100 or more employees in Oregon, this filing is due by November 15, 2017. The ERIC lawsuit alleges that ERISA’s express preemption provision preempts this reporting requirement.
This is the latest action by a state to impose reporting requirements on ERISA covered plans. Previously the state of Vermont (and other states) sought to require ERISA medical benefit plans to report their claims experience for purposes of compiling a so-called All Payor Claims Database (APCD). In the 2016 case of Gobeille v. Liberty Mutual Insurance Company, the US Supreme Court held that ERISA preempted Vermont’s APCD reporting requirement.
ERIC supports state auto-enrollment programs intended to increase access to retirement savings plans if such programs do not infringe on employers that already provide ERISA-governed retirement plans. Tracking and complying with additional reporting burdens imposed by state-run retirement plans on a state by state basis would be unduly burdensome for employers.
There has been some prominent coverage on this case, including Industry group sues over Oregon retirement plan, Employers sue to block OregonSaves requirements, ERIC files lawsuit against Oregon Retirement Savings Board, ERISA Industry Committee sues to stop OregonSaves reporting demands and Oregon’s retirement-savings plan faces legal challenge. The team will continue to monitor and provide regular updates.
Mary Samsa and Allison Wilkerson discussed that the majority of ERISA disclosures are in fact employee communications – many of which are viewed as “routine” by employers. As such, plan sponsors are continually balancing the best way in which to relay complex benefit plan information in a manner to best be understood by employees but equally satisfy the applicable regimented disclosure requirements. Some key takeaways from their presentation included not only the compliance and content requirements, but methods for delivering communications to employees, traps for the unwary (i.e., inconsistent information communicated, the advantage of having these communications reviewed by legal counsel, and oversight of third parties who assist in preparing communications) and some common sense approaches for routine reviews of communications and continuing education to participants so that periodic communications are not always monumental tasks.
Since the announcement by the Internal Revenue Service (IRS) that sponsors of individually designed retirement plans may no longer receive a periodic determination letter, plan sponsors have faced uncertainty about how to demonstrate compliance for their retirement plans. Our McDermott Retirement Plan Compliance Program, a new opinion letter and operational review program for individually designed 401(a) and 403(b) retirement plans, will allow plan sponsors to document their plans’ compliance with tax code requirements in response to the curtailment of the IRS’ determination letter program.
According to U.S. News & World Report, estimates for the cost of Hurricane Harvey’s damage have come in as high as $190 billion, and damage estimates for Hurricane Irma are still rolling in but range up to $100 billion. To assist taxpayers affected by these devastating storms, the Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation have granted multiple forms of relief to taxpayers impacted by Hurricane Harvey, Hurricane Irma, and other disasters enumerated by the Federal Emergency Management Agency.
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